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Company Earnings Announcement

Market Update 02-16-10

The European Union’s plans for aiding the ailing Greek economy continue to dominate the financial headlines this week. Last Thursday, EU member states pledged to come to Greece’s rescue—should they ask for it—without offering solid details on an aid package. That news settled equity markets while simultaneously hurting rather than helping the euro. The news also buoyed precious metals.Read more...

Mid-Week Update 10-28-09

Earnings season rolls on. Despite still less-than-compelling economic readings, earnings reports have largely been good. With exactly half of the S&P 500 companies already having reported, we’ve seen 75 percent of them meet or beat expectations. Granted, many of these upbeat results stem from cost-cutting rather than strong top-line results, but we’ll take whatever we can get.
 
The earnings reported by some TCI portfolio holdings this week weren’t off the charts, but they left a positive long-term picture for these companies intact. Let’s take FPL Group (FPL), a member of both our Growth and Income portfolios. Before the market opened yesterday, FPL reported earnings and forward-looking guidance that underwhelmed investors. Excluding one time items, the U.S.’s largest producer of wind and solar power reported earnings per share of $1.38, four cents below consensus estimates.
 
The reasons for the miss were two-fold. First, the company’s Florida utility business was punished by the recession, as the state has been one of the hardest hit. Florida’s unemployment rate has reached 11 percent – its highest since records began in 1976. The company has expanded its wind farms and solar projects to compensate for lost Florida business, but earnings during the quarter were hurt by poor wind resources in Texas.
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Mid-Week Update 10-21-09

Earnings season is well underway with about a quarter of S&P 500 companies having already reported. The results, helped by favorable year-on-year comparisons, have been largely impressive so far, with over three quarters of announcements coming above expectations and less than 15 percent falling short.
 
We have only had a few of our holdings report thus far – but we haven’t suffered from any disappointments. As we discussed last week, Intel (INTC) had a blowout quarter – beating its own revised expectations, as well as consensus estimates. The semiconductor giant’s quarter was helped by strong back-to-school revenues – the same type of sales that helped push consumer technology powerhouse, Apple Inc. (AAPL), to another record-setting quarter.
 
In its earnings announcement after the market’s close on Monday, Apple reported its most profitable quarter ever with net income totaling $1.67 billion – a 47 percent increase over last year. The record profit translated to $1.82 earnings per share, obliterating the company’s own guidance of $1.20 a share (which is admittedly always conservative), and easily beating consensus estimates of $1.43 (the highest estimate, at $1.66 was actually well short too).
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Mid-week Update 08-12-09

The government’s “cash for clunkers” program, which offers credits between $3,500 and $4,500 to those disposing of gas-guzzling vehicles and buying new, more fuel-efficient cars, is bolstering auto sales – and auto makers.Read more...

Mid-Week Update 08-05-09

            While recent economic data has pointed to things getting “less worse,” we’ll continue sorting through company earnings reports for any signs of fundamental weakness. Today we cover the quarterly report from one of the recent (August issue) additions to the Growth Portfolio. With 1.7 billion branded cards outstanding worldwide, Visa (V) operates the world’s largest electronic retail payment network. The company supplies financial institutions with its credit, debit and prepaid cards which operate via VisaNet, Visa’s centralized payment processing system. Revenues are primarily derived from fees assessed on card usage. Further, the company licenses it payment brands Visa, Visa Electron, PLUS and Interlink to its customers, banks, for use in their credit card programs.
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Mid-Week Update 07-29-09

We’ve reach the midpoint of earnings season and companies’ quarterly reports continue to be digested by the market. To date, about 75 percent of those S&P 500 companies who have reported earnings have beat consensus estimates. Unfortunately, many of these positive surprises have come on cost-cutting measures and other one-time items that are not sustainable ways of supporting earnings. The real earnings strength has come from companies with exposure to the developing world – countries whose economic engines have once again started churning. However, today we’ll highlight two of our portfolio picks that recently published results that beat estimates despite relying much on the domestic market – remarkable exceptions to the rule.
 
FPL Group (FPL), the country’s largest producer of wind power, reported profits that beat analysts’ expectations. Excluding one-time items, which included energy price hedges, the Florida-based company reported earnings per share of 99 cents, 2 cents better than estimates.
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Mid-Week Update 07-22-09

We are in the full swing of earnings season, and the market is sorting through companies’ reports to find clues as to the state of the economy. Our read has largely been that only those companies that have significant operations in the developing nations are showing strength, while many domestic companies are still having trouble. In other words, we think that the American economy is not out of the woods yet. Today we’ll review two Growth Portfolio picks that reported earnings yesterday: Coca-Cola (KO), a multinational powerhouse, and Apple (AAPL), a predominantly domestic company that has bucked the trend of weak consumer spending.Read more...

Mid-Week Update 07-15-09

Finally, some positive news. The world’s largest semiconductor company, Intel (INTC), which we profiled here just two weeks ago, reported blow-out earnings last night – and the stock reacted very positively today. During the second quarter, the company collected just over $8 billion in revenue, better than the $7.3 billion analysts were expecting. And they did this as they drew down their own inventories by $420 million.

Further, the company’s gross margins expanded from 46 percent last quarter to 51 percent in the one just completed. The company reported a net loss for the quarter of $398, or 7 cents a share due to a $1.45 billion antitrust fine levied by the European Union. Excluding this one-time item, which may even reverse itself if Intel wins its appeal, the company earned 18 cents a share – more than double expectations of 8 cents.Read more...

Mid-Week Update 07-01-09

An impressive quarter is now in the books. The second quarter of 2009 saw the S&P 500 rally almost 16 percent, its best quarterly return since 1998. Of course, this is on the heels of the sharpest market downturn in 80 years. Despite the rally, which took stocks deserving and undeserving alike from cheap valuations, there are still some bargains to be had.
 
Case in point is one of the most dominant companies on the planet – Intel (INTC). Intel is the leading semiconductor chip maker, with a global market share of approximately 80 percent. The company manufactures microprocessors, chipsets, flash memory and motherboards for computing and communications products under two business segments: the Digital Enterprise Group and the Mobility Group.
 
In Fiscal 2008, the Digital Enterprise Group accounted for 56 percent of the company’s $37.6 billion in total sales. With chips for desktop computers, servers, and enterprise applications, the group boasts high margins, and account for nearly three quarters of Intel’s annual profit of $5.2 billion. Meanwhile, the Mobility Group, with products for notebook computers and netbooks accounted for most of the remainder.
 
The Mobility Group is also an area in which Intel is concentrating on growth – centered on its new Atom processor.
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Market Update 01-20-09

The worse-than-expected reports about the economy in the last couple of weeks (unemployment numbers, consumer spending, etc.) and renewed worries about the fate of banks have taken a toll on the market. The S&P 500 is down more than 6% year-to-date, erasing much of its gains since putting in its latest low in November of 2008.   As we indicated in the update last week, Citigroup is in trouble. After disclosing over $8 billion in losses in the 4th quarter and selling majority ownership in Smith Barney to Morgan Stanley, Citigroup announced its plans to split into two entities: Citicorp and Citi Holdings. Citicorp will handle the firm’s traditional, more profitable consumer banking business and Citi Holdings will handle the riskier investment assets. By separating the good from the bad, Citigroup hopes to restore profitability to at least Citicorp and prevent the Citi Holdings’ bad assets from dragging Citicorp’s portion of business down.   The really bad news is that the troubles are not contained to just Citigroup. Last week its rival, Bank of America, reported its first quarterly loss in 17 years. To help absorb the losses incurred when Bank of America bought Merrill Lynch, it is going to receive $20 billion in new capital from the Treasury Department and the FDIC and another $118 billion in guarantees.
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